24, December 2016

The 5th Session of India – Kazakhstan Joint Working Group on Trade & Economic Cooperation

Both Sides discussed the current state and prospects of development of Indian – Kazakh economic and trade cooperation and exchanged views on the possibilities of expanding bilateral cooperation.

Significance of this bilateral ties:

Free Trade Agreement between Eurasian Economic Union & India

Both Sides expressed satisfaction at the successful completion of the Joint Study Group Report on the feasibility of Free Trade Agreement between Eurasian Economic Union (EEU) and India.

They hoped that the process of obtaining internal clearances by both sides would be completed by end of December 2016 thereby paving the way for commencement of formal trade negotiations in early 2017.

Both Sides agreed that early commencement and conclusion of formal negotiations on FTA would serve to boost bilateral trade.

International North South Transport Corridor (INSTC)

Both Sides agreed that an efficient and effective border crossing procedure and multi- modal transportation arrangement could provide further impetus to bilateral trade.

In this context, the Kazakh side informed that since December of 2014, when the “Kazakhstan-Turkmenistan-Iran” railway, which is the eastern branch of the International North-South Transport Corridor, was launched, 2.5 thousand tons of cargo has already been transported on this route.

Indian shippers and freight forwarders were requested to make extensive use of this transportation facility for bilateral trade.

Both Sides agreed that since all members of INSTC, except India and Oman, were already signatories to TIR Convention 1975, Custom issues & Common Documentation issues could be quickly resolved if India signed the TIR Convention and aligned its system.

TIR: The Customs Convention on the International Transport of Goods under Cover of TIR Carnets (TIR Convention, 1975) is one of the most successful international transport conventions and is so far the only universal Customs transit system in existence. To date, it has 69 Contracting Parties, including the European Union. It covers the whole of Europe and reaches out to North Africa and the Near and Middle East. UNECE(The United Nations Economic Commission for Europe)

Bilateral Investments

The Kazakh side expressed interest in establishing cooperation with leading Indian companies dealing with production and sale of phosphorus pentasulfide and its derivatives. The Sides expressed interest in further development of bilateral cooperation in the exploration and development of tungsten mines in the territory of the Republic of Kazakhstan and MoU between National Mineral Development Corporation (NMDC).

Both Sides agreed that there was potential for promoting investments in spheres of Oil and Gas, Civil Nuclear Energy, Uranium, Chemicals, Food Processing, Public Health, Pharmaceuticals, Information Technology and Mining and Metals.

The need to augment connectivity and information exchange dissemination and promote cooperation in Service Sector was also underlined.

Visa Issues

Indian side requested the Kazakh side to further liberalise their current visa regime for Indian citizens and in this regard proposed that the second round of Consular consultation may be held in the first quarter of 2017.

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Government of India to launch Lucky Grahak Yojana and Digi-Dhan Vyapar Yojana – Ministry of Electronics & IT

Source: PIB

The scheme will become operational with the first draw on 25th December, 2016 (as a Christmas gift to the nation) leading up to a Mega Draw on Babasaheb Ambedkar Jayanti on 14th April 2017. It will comprise of two major components, one for the Consumers and the other for the Merchants

The Government of India seeks to promote digital payment methods to encourage consumers and merchants to increasingly shift to these payment modes.

The schemes are aimed at encouraging people to move towards significantly higher usage of digital transactions through the offer of incentives.

DigiDhan Mela

NITI Aayog announces the launch of the schemes Lucky Grahak Yojana and the Digi-Dhan Vyapar Yojana to give cash awards to consumers and merchants who utilize digital payment instruments for personal consumption expenditures.

The scheme specially focuses on bringing the poor, lower middle class and small businesses into the digital payment fold.

Who is an authority?

It has been decided that National Payment Corporation of India (NPCI) shall be the implementing agency for this scheme.

Only those transactions that take place through RuPay Cards, USSD, UPI and AEPS are eligible for these schemes

It would be useful to reiterate that NPCI is a not for profit company which is charged with a responsibility of guiding India towards being a cashless society.

a) Lucky Grahak Yojana [Consumers]:

Daily reward of Rs 1000 to be given to 15,000 lucky Consumers for a period of 100 days;

To increase overall transparency in the economy and to remove the pernicious influence of cash on the political and economic system, it is essential that take a longer term view and bring in measures that would influence the behaviour of the consumers as well as merchants to shift to digital payment instruments.

It is now possible by leveraging technology to carry out business transactions digitally through mechanisms like UPI, USSD, Ru Pay cards and Aadhar Enabled Payment System (AEPS).

In a country like India where 65% of the population is below 35 years of age, whose IT prowess is well recognized and where even poor and illiterate people exercise their franchise through EVMs, this transformation toward digital economy is definitely possible, provided the citizens resolve to do so.

The issues of fast-tracking implementation of hydroelectricity projects in Jammu and Kashmir were discussed during the meeting

The inter-ministerial task force, set up by Modi government to look into strategic aspects of Indus Water Treaty (IWT) with Pakistan, discussed ways to fast-track hydropower projects of 8500 MW-capacity in Jammu and Kashmir

Projects:

These projects including Tulbul Navigation, intended at developing India’s rights over both eastern and western rivers, will require consent of government of Jammu and Kashmir, which is expected to get back to the task force next month on the issues discussed.

India has identified setting up hydroelectricity projects of a total of 18,000 MW capacity. Of these, 3000 MW have already been established.

These projects are on both the Eastern (Beas, Ravi and Sutlej) and Western rivers (Indus, Chenab and Jhelum) will develop capacities in accordance with our rights under the water distribution pact.

Pakistan claim:

Meanwhile, the government’s meeting with World Bank expert to discuss Pakistan’s objection over Kishenganga (330 MW capacity) and Ratle projects being constructed in Jammu and Kashmir, the sources said a communique to this regard is “awaited”

Pakistan approached World Bank, flagging concerns that the design of the Kishenganga project was not in line with the criteria laid down under IWT.

It had then demanded the international lender to set up a Court of Arbitration to look into the matter.

Refuting the claims made by Pakistan, India had asserted that the project design is “well within parameters” of the treaty and urged the World Bank to appoint a neutral expert as the issue is a “technical matter” as suggested in the treaty.

The international lender had then set up two separate mechanisms of COA as well as the neutral expert, which India objected to. The mechanisms were then “paused” by the Bank in view of the objections.

Indus water treaty:

India would exploit to the maximum water of Pakistan-controlled rivers including Jhelum.

Under the Indus Waters Treaty, signed between India and Pakistan in 1960 and to which the World Bank is also a party, the global body has a specified role in the process of resolution of differences and disputes.

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Niti Aayog launches ‘Performance on Health Outcomes’ index

Source: PIB

The index is launched along with Ministry of Health and Family Welfare.

This initiative (launch of ‘Performance on Health Outcomes’ index) is envisioned to bring about the much required improvements in the social sector outcomes, which have not kept pace with the economic growth in the country.

It will be used to propel action in the states to improve health outcomes and improve data collection systems

It is meant to capture the annual incremental improvements by states rather than focus on historical achievements

The government’s think tank it is anticipated that the index will assist in the state level monitoring of performance, serve as an input for providing performance-based incentives and improvement in health outcomes, and meet citizens’ expectations.

The statement said the index has been developed over several months, with inputs from domestic and international experts, including academicians and development partners, seeking feedback from states.

The exercise involves the participation of several partners including technical assistance from the World Bank, mentor agencies to hand-hold states, where required, during the exercise and third party organisations to validate the data submitted prior to calculation of the index.

Stating that data will be entered and results published on a dynamic web portal hosted by Niti Aayog, it pointed out a similar exercise has also been launched for the education and water sectors.

The features of the index, measures and methods of data submission will be disseminated to states through workshops.

The exercise involves the participation of several partners including technical assistance from the World Bank, mentor agencies to hand-hold States, where required, during the exercise and third party organizations to validate the data submitted prior to calculation of the index.

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Pranab against ordinance route to amend Enemy Property Act

Source: The Hindu

The ordinance to amend the 50-year-old Enemy Property Act was promulgated for the fifth time late on, albeit with some reservations being expressed by President Pranab Mukherjee on why the government has been unable to clear the Amendment Bill in Parliament.

Enemy Property Act:

The Amendment Bill aims to make changes to the Enemy Property Act to guard against claims of succession or transfer of properties left by people who migrated to Pakistan and China after wars.

“Enemy property” refers to any property belonging to, held or managed on behalf of an enemy, an enemy subject or an enemy firm.

The government has vested these properties in the Custodian of Enemy Property for India, under the Act in 1968, an office instituted under the Central government.

Key issues and analysis:

The Act allows transfer of enemy property from the enemy to other persons. The Bill declares all such transfers as void. This may be arbitrary and in violation of Article 14 of the Constitution.

The Bill prohibits civil courts from entertaining any disputes with regard to enemy property. It does not provide any alternative judicial remedy (eg. tribunals). Therefore, it limits judicial recourse or access to courts available to aggrieved persons.

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First 2G (Second Generation) Ethanol Bio-refinery in India to be set up at Bathinda (Punjab)

Source: PIB

The Foundation Stone laying ceremony for setting up the first Second Generation (2G) Ethanol Bio-refinery in India

The Government of India is encouraging production of Second Generation (2G) Ethanol from agricultural residues to provide additional sources of remuneration to farmers, address the growing environmental concerns and support the Ethanol Blended Petrol (EBP) programme for achieving 10% Ethanol Blending in Petrol.

The project shall also help in reducing CO2 emissions from the paddy straw which currently is being burnt after harvesting.

The Bathinda Bio-refinery will be utilizing agriculture residues for production of 100 KL per day or 3.20 crore litres per annum of ethanol which may be sufficient to meet the 26% of the ethanol blending requirement of the State.

Ethanol Blended Petrol (EBP) programme

Ethanol blending is the practice of blending petrol with ethanol.

Many countries, including India, have adopted ethanol blending in petrol in order to reduce vehicle exhaust emissions and also to reduce the import burden on account of crude petroleum from which petrol is produced.

It is estimated that a 5% blending (105 crore litres) can result in replacement of around 1.8 million Barrels of crude oil .

The renewable ethanol content, which is a by product of the sugar industry, is expected to result in a net reduction in the emission of carbon dioxide, carbon monoxide (CO) and hydrocarbons (HC).

Ethanol itself burns cleaner and burns more completely than petrol it is blended into.

In India, ethanol is mainly derived by sugarcane molasses, which is a by-product in the conversion of sugar cane juice to sugar.

Ethanol blending first found mention in the Auto fuel policy of 2003. It suggested developing technologies for producing ethanol/ bio fuels from renewable energy sources and introducing vehicles to utilise these bio fuels.

Later, as per National Policy on Bio-fuels, announced in December 2009, oil companies were required to sell petrol blended with at least 5% of ethanol. It proposed that the blending level be increased to 20% by 2017.

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PM to Lay Foundation Stone of ‘Chardham Mahamarg Vikas Pariyojna’

Source: PIB

Chardham Mahamarg Vikas Pariyojna

The project aims at improving the connectivity to the Char Dham pilgrimage centres in the Himalayas, making journey to these centres safer, faster and more convenient.

The Chardham project includes developing 900 km of national highways in Uttarakhand

The entire length of the highways will be two-laned with paved shoulder and with a minimum width of 10 metres. There will be tunnels, bypasses, bridges, subways and viaducts to prevent traffic bottlenecks.

A team of experts have been engaged to identify zones prone to landslides, and environment friendly techniques are being incorporated in the design to make these zones safer.

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Veteran Bengali poet Shankha Ghosh selected for 2016 Jnanpith Award

Eminent modern Bengali poet Shankha Ghosh was chosen for the prestigious Jnanpith Award for the year 2016. He is the 52nd recipient of Jnanpith Award.

Born in 1932 in Chandpur, now in Bangladesh, Ghosh is considered to be a stalwart in modern Bengali literature and a leading authority on Rabindranath Tagore.

India and Japan implemented a comprehensive free trade agreement in 2011. It gave easy access to Japan in the Indian steel market. Indian industry has time and again demanded to take out the steel sector from the pact. But it can happen only after both the sides agree to do the same

Japan has dragged India to the World Trade Organisation (WTO) against certain measures taken by New Delhi on imports of iron and steel products.

Disputes between countries:

Japan notified the WTO Secretariat that it had requested dispute consultations with India in the dispute ‘India-Certain Measures on Imports of Iron and Steel Products’,” the WTO

India imposed MIP of 173 products for six months, which was later extended twice for two months. Earlier this month, the government extended MIP on 19 products till February 4, 2017.

According to the commerce ministry sources, WTO-compliant measures like anti-dumping duty should be used to overcome the issue of cheap imports of commodities like steel as MIP is not compliant with the global trade norms..

One of the problems related with MIP is of money being illegally stashed off in overseas accounts of Indian importers.

Indian importers of steel are under the scanner for deliberately over invoicing to show on paper that the price of item they are importing is equal to or above the MIP while the actual price of import may be well below the MIP. The importers are alleged to have parked this difference in money between the MIP and the actual price of the products into foreign accounts to escape from Indian government’s tax.

Authorities belonging to the Directorate of Revenue Intelligence (DRI), the Enforcement Directorate (ED) and the CBI will be involved in the probe and the government will most likely discontinue the restriction.

Anti-Dumping Duties

India has imposed MIP as growing imports from steel surplus countries like China, Japan and Korea with predatory prices have been a major concern for the domestic industry since September 2014.

If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product. The WTO Agreement does not regulate the actions of companies engaged in “dumping”. Its focus is on how governments can or cannot react to dumping — it disciplines anti-dumping actions, and it is often called the “Anti-dumping Agreement”.

Countries start anti-dumping probes to determine whether their domestic industries have been hurt because of a surge in cheap imports.

As a counter measure, they impose duties under the multilateral regime of WTO. The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.

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